The 23-year-old will add depth to Villarreal's squad as he looks for more first-team exposure in La Liga.
Cheryshev was on loan at Sevilla last term and made five appearances in all competitions.
A brief Real statement read: "Real Madrid announces that player Denis Cheryshev will spend the 2014-15 season in (on) loan at Villarreal C.F."
Villarreal added on their official website: "Cheryshev, 23, is a left winger noted for his technical ability, skill, speed and overflow, which makes him a key player."
Cheryshev is a Russia international, but was not included in Fabio Capello's squad for the 2014 FIFA World Cup.
He has made just one competitive appearance for Real Madrid and been a regular for the club's second team during his time at the club.
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